Nigeria’s banking and financial system is quite user-friendly when it is compared to its Western counterparts. For instance, the ease of transferring funds from one source to another within the country has been made so seamless that one needs only an account number and a destination bank to make a payment. The banking platform takes care of the name as well as other necessary details. On the other hand, even payments from a local bank account to another local bank account in, say, the United States need exact details such as sort code, type of account and other details.
What this results in is a lot of professionalism in transacting, or else, errors will be made. One of the ways that this system has been made seamless is the introduction of the Bank Verification Number (BVN) system. When this system was introduced in 2014 by the administration of Goodluck Jonathan in Nigeria, Nigerians thought that it was just another formality to be observed. However, it was introduced to curtail the crime in the banking sector. It identifies an individual based on features such as fingerprint, signatures and some personal information. After a bank account holder enrolls for BVN, a 11-digit number is generated for this individual. This number is acceptable as a form of identification across all banking systems in Nigeria.
There has been a 5% increase in enrollment as of March 2023.
The BVN is an obligatory exercise that enables the account holder to have a single identity in the same banking system. Its aim is to protect bank customers from identity theft and other financial or economic crimes originating from the banking sector of Nigeria. And presently, the Central Bank of Nigeria (CBN) has announced that over 57 million citizens have enrolled for their verification numbers as of March 31, 2023. According to the apex bank, this represents a five-percent increase in enrollment, compared to the 54.65 million BVNs which were said to have been enrolled in the first half of 2022.
CBN governor, Godwin Emefiele, spoke at the 34th seminar for finance correspondents and business editors on the challenges CBN faces as well as the key policies that have been introduced to make payments faster. At the seminar, which was held on Tuesday, May 2, 2023, Emefiele said that the CBN has continued to collaborate with relevant stakeholders in adopting different payment system instruments and channels. Some of these channels include: BVN, Real-Time Gross Settlement System (RTGS), Regulatory Sandbox, Open Banking, and the CBN Digital Currency (CBDC) (the eNaira).
Poor telecoms infrastructure impeding CBN policy implementation.
The CBN governor acknowledged that the payment system regulation and management role of the CBN is very critical in achieving its primary mandate of price and monetary stability for sustainable economic growth. The financial institution is also important for a stable, safe and efficient financial system in Nigeria. Emefiele said that the implementation of CBN’s initiatives in the banking sector has been slow due to several issues in the telecoms industry. He said the CBN is dealing with weak social infrastructure, cyber fraud, and unlicensed companies that affect the effective operation of payment platforms.
Payment processing relies on stable telecommunication networks and power infrastructure. The governor said that these amenities do not currently run optimally in Nigeria, so the situation impacts the stability and resilience of the payment system. Consequently, some entities have continued to exploit access to information technology to engage in regulated activities without the appropriate licenses and authorization. He said that the activities of fraudsters continue to threaten these payment platforms and negatively affect the confidence of the public.
Verification is CBN’s way of mitigating cyber fraud.
Fortunately, the CBN has been able to collaborate with other players in the industry to help curtail the nefarious activities of these fraudsters. Emefiele confirmed that the BVN system has helped the financial industry in investigating crimes. Also, including the BVN in the Know-Your-Customer (KYC) requirements of banks has eased the constraints associated with poor identification of customers. If the enrollment of customers increase in this manner every year, Nigeria will be on its way to creating an efficient credit system where every customer is accounted for and where every default is tackled in a centralized way.
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BVN enrollment reaches 57m people, CBN says. – Measures like this were introduced to ensure a stable and safe financial system. – Express your point of view.
This BVN is one way the government and the CBN has been able to ensure the registration of identity of people. It has helped us to trace people with their account. It is really helpful.
The news that BVN enrollment has reached 57 million people is a positive step towards greater financial inclusion in Nigeria, but much more work needs to be done to ensure that everyone in the country has access to the financial services they need.
The BVN enrollment has really bring lots of development and changes to the banking and overall financial sector of the economy.It has reduced fraud and boost the confidence of the people that their money is save and secured.
The introduction of BVN improve the banking system which also help the CBN to monitor day to day transaction perform between customers and bank. It also help by reducing illegal transaction in the banking system
BVN enrollment reaches 57m people. BVN as idea is really a good thing that was introduced it help in identify people and can easily trace people account no matter how many account someone own CBN can’t be monitor all transaction and illegal transaction will be caught
The introduction of BVN into Nigeria banking system has been a blessing that have help develop it more. Account holder have a single identity in the same banking system and have there account protected.
Honestly, BVN is one of the best that has ever happened in Nigeria. It is one of the best tool that can be use to curtail criminality in the country. I have some major problem with the way people’s data are handled in the country. There a time the telecoms were told to gather their costumers info after a while the FG did the NIN. We have enough data to fight crime in this country but under utilized. BVN is outstanding among all these and a reliable tool that can be use to track fraud.
BVN system is the best tool ever released by the CBN to curtail fraud in the banking system and Nigeria. I will urge the FG and the CBN to force more people to enroll for it.